The US Dollar Index continues to decline, while the Euro and Pound exchange rates hit a new high in 2024
The sharp drop in the US dollar has driven the euro and pound to reach new highs in 2024. The Bloomberg Dollar Index has fallen for three consecutive days, with the current decline at about 1.9%. The euro against the dollar rose to 1.1130, while the pound against the dollar rose by 0.5% to 1.3052, reaching the highest level this year. Traders are paying attention to clues of a Fed rate cut and are expected to carefully study Powell's speech on Friday. Speculation on revisions to employment data may also further weigh on the US dollar
According to the Wisdom Financial APP, the sharp decline of the US dollar is driving the rebound of other major currencies, pushing the euro and pound to new highs in 2024, as traders are focusing on the future trends of global interest rates.
On Tuesday, the Bloomberg Dollar Index fell for the third consecutive trading day, hitting its lowest level since March, with the decline so far this month expanding to about 1.9%. As Federal Reserve Chairman Powell and other officials spoke at the annual symposium in Jackson Hole, Wyoming, traders were anticipating any clues about the scale of interest rate cuts.
The weakness of the US dollar pushed the euro to the dollar exchange rate to around 1.1130 on Tuesday, the highest level this year. The pound rose 0.5% against the dollar to 1.3052, the highest level since July 2023, while the Swiss franc rose by over 1% to a daily high of 0.8540 against the dollar. US Treasury bonds rose across the board.
Vasileios Gkionakis, Head of European Economics and Strategy at Aviva Investors, said, "If US economic growth slows while global economic growth remains relatively stable, this should lead to a weaker US dollar."
At the Jackson Hole Global Central Bank Annual Meeting, traders will closely examine Powell's speech on Friday for any signs that the Fed will cut interest rates by 25 basis points or more in September. Prior to this, preliminary benchmark revision data released by the US Bureau of Labor Statistics on Wednesday may show that US job growth is not as strong as previously estimated.
Skylar Montgomery Koning, a foreign exchange strategist at Barclays Bank, said, "The foreign exchange market continues to be excited about the dovish stance that the Jackson Hole Global Central Bank Annual Meeting may put pressure on the US dollar." On Tuesday, speculation about a significant downward revision to the employment data intensified this view